50 years and not a bit wise

For the past two years, SAP CEO Christian Klein has been struggling to reorganize the construction sites of his predecessor Bill McDermott and to give SAP a new perspective. The young CEO has succeeded in many areas because he has a very charming personality, but he has not moved any mountains. On the contrary, problems were not solved, but shifted and thus became even bigger.

What analysts currently think of SAP can be clearly seen from the share price. It hovers around 90 euros, but is usually lower. This state of affairs must be doubly painful for shareholders and, above all, Professor Hasso Plattner, because analysts at Credit Suisse, Goldman Sachs, UBS, Warburg Research and Baader Bank see great potential in the stock. Their valuations from mid-May of this year range between 130 and 146 euros per share.

According to the financial analysts, SAP has "room for improvement," but Christian Klein, as SAP CEO, is obviously unable to realize this potential. The first pawn in this predicament is SAP CFO Luka Mucic - which seems strange: Ultimately, he is the one who communicates with the analysts. If Mucic succeeds in convincing them that SAP is worth more in real life than its current stock price reflects, then Professor Hasso Plattner should not throw him out the door as a killjoy.

Luka Mucic has a problem: Since his first days at SAP, he has impressed with his expertise, brilliance, accuracy, prudence, and foresight, but he has never had an emotional connection to Hasso Plattner. What Mucic sets out to do should be realized by other SAP board members. Under the leadership of Christian Klein, Chief Technology Officer Jürgen Müller and Chief Applications Officer Thomas Saueressig should realize precisely this potential so that the share price is once again well above 100 euros.

The root of the problem does not lie with Luka Mucic, who has now pulled the ripcord and will leave SAP at the beginning of next year. The challenges lie with Chief Technology Officer Jürgen Müller, who, however, as a former doctoral student at the Hasso Plattner Institute at the University of Potsdam, is protected by Professor Plattner. Applications board member Thomas Saueressig, on the other hand, is protected by CEO Christian Klein, which counts for just as much. On the hit list, on the other hand, seem to be board members Sabine Bendiek and Julia White, both of whom came from Microsoft.

Weak share and strategy

The combination of a weak share price, a weak strategy, and a weak boss is currently reviving an old discussion: the takeover of SAP by Microsoft. This project was once considered one of many pet projects of Dietmar Hopp and Hasso Plattner. At the time, however, SAP overshadowed the entire B2B IT market, and a merger between Microsoft and SAP would not have been waved through by either the Cartel Office in Bonn or the EU authorities in Brussels.

SAP is still the intellectual ERP world market leader, but many competitors have shifted the balance of power. It is quite possible that a takeover by Microsoft would now no longer arouse suspicion. Naturally, the low SAP share price makes the implementation of the former plan even more likely. Even though Luka Mucic has repeatedly emphasized that the share price does not reflect SAP's true strength, and some financial analysts see it similarly - as long as nothing changes in the constellation of Christian Klein and Hasso Plattner, SAP will remain in a state of limbo.

Very succinctly and in one sentence, Manager Magazine author Christina Kyriasoglou summarized the state of SAP in the current July issue of the magazine on page 46: "In addition to the software business's difficult transition to the cloud and a dried-up innovation pipeline, chasms are opening up in the company's culture." Accordingly, there is not one problem at SAP, but many - and apparently Hasso Plattner wants to solve all of them together with Christian Klein in the next two years. A Herculean task.

Microsoft Moment

MM author Christina Kyriasoglou quotes an unknown informant in her brilliant analysis. Ms. Kyriasoglou writes: "'SAP needs a product-obsessed CEO,' says one insider, referring to the Microsoft company's impressive transformation under Satya Nadella. 'A Nadella moment to get back to its old glory. 'But Hasso Plattner can't afford a Nadella, so no such moment is likely to come.'" This announcement closes the circle and the option of a takeover of SAP by Microsoft becomes more and more likely.

It could happen that Professor Plattner sees no other way out, after Luka Mucic now also Christian Klein to say goodbye and then with due distance also Jürgen Müller and Thomas Saueressig. Marketing Director Julia White and Sales Director Scott Russell will then discuss the vacant SAP CEO seat. However, if Microsoft's influence on SAP grows by then, Ms. White will certainly have the better cards.

Even if the current criticism of SAP is similar to Hornberger Schießen, Christian Klein's position is at risk despite all the sympathy from Hasso Plattner: Klein's longtime mentor was originally slated to succeed Plattner, which would have been a jackpot for the young SAP CEO. For reasons outside SAP, this interesting constellation and succession arrangement will now not come to pass. Christian Klein will have to go through thick and thin with Hasso Plattner over the next two years.

Annual General Meeting 2022: It's not going to happen

Anyone who wants to get an overview of the state of SAP away from business management and technology should watch the recording of the SAP Annual General Meeting. Such a lack of respect for shareholders is hard to beat. A picture of manners.

The hubris of the SAP Supervisory Board and Executive Board was palpable, even if it was a virtual AGM. The concern about SAP seems justified: How does the corporation solve problems? How do the members of the Executive Board communicate? What image do the Supervisory Board and Executive Board want to convey to shareholders, existing customers, analysts, partners and the entire SAP community? Not even at the annual general meeting, the mandatory date, did all the members of the Executive Board make it to a personal presence in respect of the shareholders.

It seems as if SAP has never mentally moved beyond the state of a family business. The product success in the ERP market is overwhelming, but the structures, the organizational and operational structure, are sobering. Manager Magazine author Christina Kyriasoglou says in the current July issue of the magazine that chasms are opening up in SAP's corporate culture. For a global corporation that was supposed to present itself to the world at the Annual General Meeting, the online event was a weak calling card.

The proceedings at the Annual General Meeting were therefore inconsequential to predictable: The AGM approved all the proposals put forward by the Executive Board and Supervisory Board. Professor Hasso Plattner was re-elected with 90.48 percent of the vote. Plattner thanked the shareholders for their support and investment in SAP: "In my 50 years of working for this company, I have learned one thing: SAP is a great company that continues to unfold its potential. I consider it an honor and a privilege to have been able to found, shape, develop and lead this company. And I look forward to continuing to do so over the next two years."